Being a headhunter offers privileged insight into the thoughts, ideas and practice of great leaders. One aspect of leadership my colleagues and I assess for clients in the industrial sector is approach to change. Set out here is just a snapshot of insight gained from such discussions over the last 12 months – I hope it is of some interest!
We are living in a world of increasing turbulence. When old certainties and reassuring norms dissipate, behaviour can follow a similarly erratic pattern; from confusion, fear and paralysis through to dogmatism, polarised thinking, focus on individual rather than collective needs, and maverick tendencies.
Successful organisations are those that thrive in such times. They have the leadership model to carry their people, customers and stakeholders through choppy waters, responding positively to the new and disruptive, but also leading and shaping change.
The look and feel of leadership and therefore leaders, is shifting in simple terms from the traditional ‘top down’ model to the far more collaborative, drawing on skills and styles to meet a range of ever changing needs. This is in response to the changing structure/nature of business and work – moving away from clear career paths, long tenures and strong company loyalty, to portfolio careers and even the ‘gig economy’ where a flexible approach is essential. However, there remains a need for those extraordinary people who inspire, motivate, create a clear vision from a complex range of ideas, see opportunities and threats missed by others and much more. Without them there is confusion, lack of clarity or direction, demotivation and ultimately failure.
Vision, communication, know your customers!
Great businesses have visionary leaders. Many influential leadership thinkers emphasise the importance of vision to any change leadership process, but this alone is not enough. One must be able to communicate that vision across and through your business and beyond, to key stakeholders including, of course, your customers – whom you need to truly ‘know, understand and have gained their trust’ in the course of creating that vision.
A central threat to successfully handling change is insufficient knowledge about customers’ behaviour and habits, and lack of insight into market trends. Use of technology makes this process both easier and more challenging. Intelligent and sensitive application allows us to understand customers’ likes, dislikes and routines on a minute by minute basis, but also means that competition and disruptive innovation can spring from anywhere. Keeping one person in their bedroom from ‘eating your lunch’ is a serious consideration across sectors.
As mentioned, periods of transformation are unsettling and risk creating confusion and demotivation at all levels. However, the ability to flex and adapt quickly is essential so how do you balance these competing forces?
A critical factor is getting everyone on board. Larry Bossidy (former CEO and Chair at Allied Signal, Chair at Honeywell and Board roles at JP Morgan and Merck) spoke of the importance of uniting people through common objectives when navigating change. "It isn't the specific initiative that matters, it's the fact that you cause people all over the business to work together to get the objectives achieved…Once you can get people from all segments of the business working together, then you can introduce measures that can bring about change more easily."
A rail industry CEO told me "Engagement is key to delivering successful change and leading a business during transformation".
One potentially effective strategy to build engagement is using past failures to reveal the benefits of proposed change. As the Group HRD of a major construction firm noted "Tap into dissatisfaction of the past to drive new ways of working".
Approach and sector experience
Effective leaders during periods of change are open minded, great listeners, good communicators and strong team builders. They trust their people and naturally tend to delegate, creating accountability for key decision making. An interesting and regular topic of discussion, particularly when my colleagues and I are taking a brief to recruit a senior executive, is the extent to which sector specific experience is required. It is clear that a ‘fresh approach’ can be an advantage when leading a major change initiative, particularly in sectors where traditional culture and practice still hold sway. As long as this is handled with a high level of emotional intelligence, and true ‘engagement’ is employed, then extraordinary shifts can take place in cultural environments seemingly ‘set in stone’. Most highly effective senior leadership teams employ a balanced blend of sector expertise and innovative/disruptive approaches. The exciting task of the CEO is to make this dynamic work, balancing the art of the possible with the art of the practical.
Leaders can readily transfer across sectors provided they are engaged, and crucially recognise what they need to know and are willing to learn. They require high levels of humility and curiosity. As long as there is a critical mass of sector specific skills and knowledge in the team, there is no reason why inspiring leadership cannot transfer across, on the face of it, quite different industries. Change at the top always presents a risk. The Board must ensure that effective governance is in place to mitigate the risk presented by a passionate and visionary new CEO, whilst supporting his/her remit to lead the business in perhaps a new and exciting direction.
Balancing the internal focus with external forces
I referred to the critical importance of knowing your customers’ habits and needs and keeping on top of the market. However, focussing inward is easily done, especially during tough times and when leading a performance turnaround. During times of change, it is critical that CEOs don’t lose sight of the outside world and actually spend time with customers, ensuring that insight gained is at the centre of strategy development.
Overall, the ability to take people with you is a critical skill for leaders during periods of change. Doing so greatly reduces the likelihood of ‘change fatigue’ and overcomes risk aversion. A key skill in this regard is to create a culture where ‘pace’ is seen as both the norm and desirable. A business where strategic decision making and implementation is ‘sharp’, adaptable and readily refreshed is invariably one that embraces change and can discard the ‘comfort blanket’ of tradition.